Carnival Corporation generated $90 million on its ships during the last quarter and expects cash levels to “grow over time” as more ships return to service and occupancy increases.
Speaking on a third-quarter results call on Friday, chief financial officer David Bernstein said the operating ships across the company’s fleet were cash flow positive despite preparations starting two months before resuming sailings.
Across Carnival’s North American brands – such as Carnival Cruise Line, Holland America Line and Seabourn – occupancy levels were 68%, while European brands had occupancy levels of 47%.
Bernstein said: “The ships in service during the third quarter were cash flow positive. They generated nearly $90 million in ship level cash contribution.
“This was achieved with only a two-month US-based restart during the third quarter as our North American brands began cruise operations in early July.
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“We expect the ship level cash contribution to grow over time as more ships return to service as we build on our occupancy percentage.”
Bernstein added that revenue per passenger cruise day for the third quarter of 2021 “increased compared to a strong 2019 despite the current restraints on itinerary offerings that did not include many of higher-yielding destination rich itineraries offered in 2019”.
Carnival expects the 50 ships operating during the current quarter to also be cash flow positive.
In terms of booking volumes, the company said it had seen an “uptick” in recent weeks after a dip in consumer confidence in the US as Covid-19 cases spiked due to the Delta variant.
On pricing, Bernstein added: “Pricing on our second half 2022 booked position is higher than pricing at the same position for 2019 sailings, driven in part by the bundle pricing strategy for a number of our brands, excluding the dilutive impact of future cruise credits.
“If we were to include the dilutive impact of future cruise credits pricing on the second half of our 2022 booked position it is now in line with pricing for 2019 sailings. This is as result of pricing trends that we’ve seen in the third quarter. This is a great achievement.”
Bernstein also outlined how new vessels delivered to the company were more cost-effective than existing vessels. P&O Cruises recently launched its liquefied-natural gas-powered ship Iona (pictured) in August.
“The new ships coming in tend to be 15% to 25% lower on a unit basis than the existing fleet,” he explained. “Fuel consumption – we’re talking about 25% to 35% more fuel efficient.
“We do see the enhanced profitability. When you start adding in the better cabin decks, the better opportunity for onboard revenue because there is more public space on larger ships – all of that does bode well for improved returns on new ships compared to the existing fleet.”